Business
Turkey- Sri Lanka trade continue to surge
Further strengthening the longstanding relations between Sri Lanka and Turkey, bilateral trade between both countries continues to grow.
“Both countries have regularised its dialogue and cooperation through the Turkey-Sri Lanka Joint Economic Commission.
This provides a structured platform to develop and further advance the bilateral economic and technical partnership.
Diversifying and broadening our economic agenda is a priority for both Governments. Turkey is becoming one of Sri Lanka’s important trading partners,” Minister of Industry and Commerce Rishad Bathiudeen said.
Addressing the ‘96th Anniversary of the Proclamation of the Republic of Turkey’ celebrations held in Colombo, Minister Bathiudeen hinted that Turkey is no more a small trade partner of Sri Lanka.
”Turkey is becoming one of Sri Lanka’s important trading partners. The total bilateral trade turnover in 2018 was US$ 351.18 Million,” he added.
According to Sri Lanka Department of Commerce, total bilateral trade in 2017 was US $ 318 Mn, which means total trade between both countries has grown in 2018 (YoY) by 10.4% and in comparison to 2016, the 2018 trade has surged by a huge 57% (from US $ 224 Mn).
“Both countries are also formalising the legal framework for cooperation in sports, education, agriculture, SME development, customs and defence. We have also recognized the need to diversify our basket of exports to Turkey,” Bathiudeen noted.
In 2018, Sri Lanka’s exports to Turkey was at US $ 218.4 Mn. 75% of exports to Turkey in 2018 were Ceylon Tea (at US $ 163 Mn), followed by yarn (8%), apparel (3.5%), and rubber tyres (2%).
Sinhaputhra Finance gets chance to raise capital
This action was taken further to the regulatory actions taken against the Company, the Monetary Board of the Central Bank.
In view of the proposed capital augmentation plan submitted by the Sinhaputhra Finance PLC and in the interest of depositors, the Monetary Board decided to provide it with an opportunity to implement the proposed capital augmentation plan within the time frame stipulated.
Beleaguered finance company, Sinhaputhra Finance PLC’s licence was given notice of cancellation by the industry regulator, the Central Bank with the company objecting to the move.
In an announcement to the Colombo Stock Exchange (CSE)last month the CB said that owing to the critical financial condition, and due to non compliance to the Finance Business Act directions issued by CB, this decision was taken. Sinhaputra has the right to object within 30 days, it said.
The company announced to the CSE that the company has submitted an objection and that a comprehensive capital plan backed by an investor who has demonstrated financial credibility of meeting the regulatory capital requirement was submitted to the Monetary Board of the CB and the company's awaiting their response.
Last year the company said that it was talking to prospective investors to infuse much-needed capital.
The company in a stock market filing last November said that the Board of Directors was negotiating with a few potential investors through a professional investment bank.
Currently, the company’s focus is to find an investor who can actually move beyond the Rs. 2.5 billion capital requirement based on the deadline given,” it said, adding that it will be able to resolve this matter before January 31, 2019.
The CSE put the company on a 'Watch List' due to an emphasis of matter on going concern in the audit report for the year ended March 31, 2018.
DLB 'Kotipathi Kapruka'; Lucky winner bags biggest jackpot in Sri Lanka's history
The Development Lotteries Board (DLB) announced today that its 'Kotipathi Kapruka' lottery has been able to award the biggest jackpot in Sri Lanka . A lucky winner from Ratnapura has won the final jackpot of LKR 145,029,213.00 in the 513th draw of of the lottery on October 27.
This winning lottery ticket has been sold by DLB agent, Ms. R. Priyanthi of Godakawela.
Although the Kotipathi Kapruka Lottery was initially introduced to the market in 2016, it was relaunched last August with an attractive look and DLB is proud to announce that within a short period of 3 years, a lucky person has been able to win the largest jackpot awarded in Sri Lanka's history, a statement from the DLB said.
Kotipathi Kapruka which was initially named as Kotipathi Shanida has been able to produce 08 jackpot winners to date and has disbursed a sum of LKR 751 million as prize money.
"While wishing all our customers the best of luck in their future purchases of DLB lotteries, we hope that they too will win the jackpot and the DLB expects to offer better and innovative lotteries in the future too", the statement said.
Indian industrialists vie multi million projects in SL
This was conveyed when Director Praful Kumar along with his delegation met with the Minister of Industry and Commerce, Rishad Bathiudeen in Colombo.
The Industry-led and industry-managed CII is India's second largest industry chamber with more than 9100 direct and over 300000 indirect membership of firms from 291 various national and regional bodies (private and public sectors, SMEs to multi nationals). CII is no stranger to Sri Lanka and its previous teams visiting Colombo met Minister Rishad Bathiudeen on several occasions.
"We are interested in securing large scale projects in Sri Lanka such as refineries, IT parks, desalinisation plants, pharmaceutical zones, container terminals and vocational training facilities. Many mechanisms are available in India for funding of such large projects overseas. We at CII can be a facilitator for such project funding in Sri Lanka as well. We can move in with funding from Indian Exim Bank. The Buyers’ Credit (BC) project funding mechanism of Indian Exim Bank is one such way,” Director Praful Kumar said.
In Buyers’ Credit, project execution is done by an Indian firm called the project exporter. Even though the fund recipient is an Indian company, the firms in the target country too benefit immensely. 75% of the material for the project needs to come from the Indian firm, but Sri Lankan contractors can supply the labour -and also the 25% materials in the BC project.
The benefit of this is that there is no limit for the dollar value of the project-it could be a low US $ one million or high US $ 500 million-or much more. The US $398 Mn project commenced in Ghana recently under BC by the Indian Exim bank and the project on a new road in Maldives at US $20 Mn are examples. Average project length is three years and it takes about three to six months for initial background work. High-value projects such as ports, bridges, highways, and IT parks are a good match for BC projects.
"Even though revenue generating projects are preferred for most BC projects, even social non-profit projects without revenues, too are possible. We can facilitate top Indian multinationals such as Reliance, Wipro, Tata, Aditya Birla etc to Sri Lanka in this if the projects are large scale," he said.
Meanwhile, since March 2018, Sri Lanka has been placed in the Positive List of Countries for Buyer’s Credit under India’s National Export Insurance Account (NEIA) by India’s Export Credit Guarantee Corporation (ECGC).
The main investment sectors that Indian FDIs in are tourism & hotels, petroleum-retail, manufacturing, real estate, telecommunication, banking and financial services. Among investments by Sri Lankan companies in India are apparel (Brandix, MAS holdings), furniture (Damro), energy (LTL Holdings), and in freight servicing and logistics (DRH Logistics and Freight Links International).
Seven medical camp of DLB sathkara at Hambantota
Another phase of the series of medical camps hold by DLB under the theme 'DLB sathkara' for the benefit of its Sales Agents and Sales Assistants, has been successfully came to the end in Hambantota recently.
This has been held for the benefit of the Sales Agents and Sales Assistants of Hambantota district and it marked the seventh event of the series. This camp was held on 13th October and nearly 300 came to get the service of the camp. The camp conducted medical tests and further offered spectacles to needy people along with other medicine.
In the meantime tricycles were also awarded to three differently able sales assistants and further garden umbrellas were provided to sales assistants whilst the sales agents were provided with bicycles.
Mr. Sena Suriyapperuma, Chairman of DLB , Mr. Chanaka Dodangoda, Deputy General Manager, Mr. Sunil Jayarathna, Assistant General Manager (Sales) , Mr. Mahinda Dissanayaka, District, Zonal Manager of Hambantota and other guests have participated in the event.
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Casino mogul Ravi Wijeratne takes over MTD Walkers PLC
Accordingly, in a filing to the CSE released today, MTD Walkers PLC said that they received a letter dated 6th September 2019 on Monday (9th September) from Ravindranath Wijeratne which stated that he had agreed with MTD Capital Bhd to purchase a majority stake amounting to 152,183,583 ordinary voting shares of the company constituting 90.78% through a voluntary offer to be made to all the shareholders of the company, in terms of the Takeovers and Mergers Code of 1995 as amended.
In March 2018, Anunine Holdings, led by Deshamanya Anurath Abeyratne and his family, has bought the entirety of its 91% controlling stake in MTD Walkers PLC for an amount between US$ 8-10 million.
Several local banks sought injunctions against MTD Walkers PLC on February 6th, 2019 over the recovery of loans.
Published accounts reveal liabilities in the region of Rs.18 billion clearly stating that the sale price of US$ 8 million is inadequate to settle all liabilities.
A renowned Indian and Japanese investor consortium has taken over the ownership of MTD Walkers from Malaysia’s MTD Capital Bhd shortly in a transparent share transaction in the CSE dispelling unwarranted rumors spread by interested parties, company sources said.
The deal was sealed following the infusion of US$ 25 million by the new investors, stock analysts said.
The Colombo Stock Exchange halted trading of MTD Walkers’ shares in January this year after calling for clarification—albeit belatedly—about recent events at the troubled conglomerate.
Separately, the Commercial High Court issued enjoining orders in favour of eight banks, restraining MTD Walkers PLC from transferring any of its shares in any of its subsidiaries to its Malaysian parent company until it settles billions of rupees in debt to the lenders.
Central Bank issues license cancellation notice to The Finance Company
The Finance Company PLC (TFC), a Finance Company licensed under the Finance Business Act No. 42 of 2011 (FBA) was severely impacted by the failure ofa number of financial institutions within the Ceylinco Group in 2008.
Since then, the financial status of the company deteriorated gradually, leading to a severe liquidity crisis. Although, several efforts were made to identify prospective investors and to restructure the company, such efforts have not materialized to a satisfactory level yet.
The Monetary Board of the Central Bank of Sri Lanka (CBSL) having considered the weak financial performances of TFC,tooka number of regulatory actions under the provisions of FBA, with effect from 15th February 2019, with a view to safeguard the interests of the depositors and other stakeholders of the company. The regulatory measures included suspension of accepting new deposits, withdrawal of deposits and disbursement of loans and advances to facilitate the restructuring process of TFC.The primary objective of the regulatory actions was to identify a potential investor for TFC within a reasonable time period. However, TFC has not been able to find an acceptable investor to date to revive the company.
It is important to understand that the revival of TFC entirely depends on the availability of an acceptable investor who is willing to invest in the equity capital of the company. Accordingly,the Monetary Board instructed TFC to call Expressions of Interest (EOIs) from potential investors and to request such investors to submit their Business Restructuring Proposals to revive TFC.
However, TFC was not able to receive an acceptable EOI from any credible investor along with evidence for the availability of funds. It is also noteworthy to mention that the company is incurring a monthly loss of around Rs 200mn. Hence, it is obvious that operation of the company in this manner will be further detrimental to the interest of the depositors and other stakeholders.
Accordingly, the Monetary Board in terms of the powers vested under the FBA, decided to issue a Notice of Cancellation of the License issued to TFC, with effect from 23rd October 2019 to safeguard the interests of the depositors and other creditors. Any credible investor can still submit an acceptable EOI along with proof of funds for capital infusion and a Business Restructuring Plan for the consideration of TFC and CBSL.
Interest due for deposits will be paid continuously to the depositors as per the CBSL directions. At the same time, all borrowers of the company are strictly advised to pay their dues. Such borrowers are encouraged to pay their dues via bank accounts designated by TFC or to the nearest TFC branch. They should also ensure to obtain receipts for the repayments they make.
Attention is also drawn to the fact that the deposit insurance and liquidity support scheme will also safeguard the interest of all depositors to a maximum of Rs.600,000/- per depositor, which will cover 94 percent of the TFC depositors in full. Therefore, the depositors are kindly requested to cooperate with the CBSL.
The depositors may contact the Department of Supervision on Non-Bank Financial Institutions of the Central Bank of Sri Lanka through 0112 477 573, 0112 477 229, 0112 398646, 0112 398733 or 0112 477 504 and This email address is being protected from spambots. You need JavaScript enabled to view it. for further clarifications.
LHI celebrates 35th anniversary establishing global footprint
Lanka Hydraulic Institute Ltd (LHI), a leading Sri Lankan engineering consultancy firm, has been extending its hydrology expertise for 35 years in the coastal and water sector with more than 400 consultancy projects completed worldwide, senior officials of the institute said.
LHI has completed 26 major projects including 2D physical modeling for coastal protection ventures worldwide during the fiscal year 2018/19, they said.
The institute has been in the frontier of consultancy services in the engineering sector providing solutions for complex coastal and environmental issues/ projects worldwide.
LHI was established in 1984 by the conversion of the Coastal Engineering Research Centre (CERC) of the Coast Conservation Department into a Public Limited Liability Company in accordance with a Cabinet decision, Chairman of the company Dr. Ranjith Galappatti revealed.
Mr Galapatti a distinguished old Royalist noted that hydrodynamic model testing is used extensively in hybrid and composite modeling, in which physical models work interactively or combined with numerical models and informatics systems.
“This provides customers with ground-breaking solutions. Accurate and up-to-date equipment are available in-house, and our equipment is tested by experts regularly,” he added.
LHI’s comprehensive model testing facilities serve customers and projects within port, coastal, hydraulic and offshore engineering.
Model testing has been conducted for the past two decades for different clients from all over the world, he pointed out adding that physical modeling covers a wide range of testing for most of the coastal engineering applications.
It includes Breakwater Stability Testing, Harbour Disturbance Modeling and Ship Movement Modelling, etc, he explained.
A significant feature is that all projects are handled inhouse using Sri Lanka expertise, LHI CEO Janaka Kurukulasuriya, a former Urban Development Authority (UDA) Chairman,said..
All its processes are streamlined, quality assured, and in accordance with ISO 9001:2008. LHI’s services are relied upon by a number of international clients in Algeria, Bangladesh, Belize, Bhutan, Brunei, Eritrea, France, India, Iran, the Maldives, Mauritius, Oman, Senegal, South Korea, and the UAE, he said.
French financial institution steps into assist Sri Lanka's SMEs
A French financial institution has stepped into financing Sri Lanka's small and medium-scale enterprises via the commercial Bank of Ceylon.
Proparco, a subsidiary of Agence Française de Développement (AFD) Group dedicated to private sector financing, signed an agreement with the Commercial Bank of Ceylon for the funding arrangement recently.
Through this agreement, Proparco will be supporting a major player in financing Sri Lankan small and medium-sized enterprises through a USD 25m loan allocated to Commercial Bank of Ceylon (CBC),AFD official said.
By allocating a USD 25m loan to CBC, Proparco is reasserting its support to SMEs in the country after many other credit lines targeted towards this key segment of the economy.
This new long-term financing is expected to create or support over 5,000 jobs in Sri Lanka.
This operation is in line with Proparco’s commitment to support access to finance for SMEs in developing countries and emerging economies.
Over the last ten years, Proparco’s parent company, the French Development Agency, has committed 600 million EUR to sustainable projects in Sri Lanka in key development sectorsincluding water and sanitation, urban development, energy, and irrigation.
With this project, the AFD Group's investments in the country will cross 850 million euro.
Small and medium-sized enterprises (SMEs) are the backbone of Sri Lanka’s economy.
They make up about 75% of the total number of companies in the country and account for almost half of employment and GDP in the country.
Despite the key role they play in the national economy, Sri Lankan SMEs experience major difficulties in obtaining credit, which has a significant impact on their capacity to invest, recruit and grow.
Ceylon tea demand in European countries drops due to quality issues
The demand for Ceylon tea in several European countries recorded a drop following the cancellation of quality certification given to local tea, industry sources said.
Tea exporting neighboring country and several NGOs are carrying out a conspiratorial campaign to undermine Ceylon tea at time where its demand gathering momentum, a group of plantation sector executives claimed.
A world wide publicity campaign and social media campaign are now being carried out that the island nation has failed to improve the living standard of tea plantation works there by violating good worker practices.
Further, the US embargo imposed on Iran has greatly affected the Sri Lanka tea exports to that country, they said.
30 present of Sri Lanka upcountry and low country has been rejected in tea auctions due to drop in sales to Iran, tea sector executives said adding that several plantation companies are on the verge of closing down due this reason.
In order to export tea, companies have to comply with local and foreign standards and regulations pertaining to food quality and safety.
These are usually mandatory, product standards. In this regard, tea has to comply with ISO3720 product standard for black tea.
In addition to ISO3720, the Sri Lanka Tea Board requires tea exports to comply with other product standards, including foreign matter, micro-biological contamination, heavy metal and pesticide residue limits, which are specified and monitored by the Tea Board.
International food assurance standards such as Hazard Analysis and Critical Control Point (HACCP) and ISO22000 (Food Safety Management System) are also increasingly becoming important in the tea trade.
Business registration from home
He was moving regulations in parliament under the Public Contract Act and accordingly, fees payable (VAT excluded) on four types of contracts have been amended.
In that, the new fee of Rs 2000 is applicable for application for registration as an agent, sub-agent, representative or nominee for or on behalf of a tenderer, the new fee of Rs 10,000 for application for registration of a public contract, the new fee of Rs 2000 for application for renewal of a registration and the new fee of Rs 10,000 for application for re-registration of a public contract.
The Department of Registrar of Companies earned a revenue of about Rs 600 million and Rs. 664 million in 2017 and 2018 respectively.
The “Starting a Business Indicator” of Ease of Doing Business rankings for Sri Lanka (at 87.87 out of 100) showed the country ranked at second in South Asia just after Maldives (at 89.17).
The South Asian regional average for Starting a Business Indicator is 85.44.
Central Bank to cancel Sinhaputhra Finance license
Monetary Board of the Central Bank of Sri Lanka, has decided to cancel the license issued to Sinhaputhra Finance PLC under the Finance Business Act No. 42 of 2011 (FBA)FBA.
The Company in a stock exchange filing informed that it has received a notice of cancellation of license granted By the Central Bank to carry out finance business under the FBA as the company was facing liquidity crisis.
Further, the Director of the Department of Supervision of Non- Bank Financial Institutions of the Central Bank has decided to cancel the Certificate of Registration of Sinhaputhra Finance as a Registered Finance Leasing Establishment under the provisions of the Finance Leasing Act No. 56 of 2000 (FLA).
However, Sinhaputhra Finance says that it has submitted an objection against the cancellation of license and a comprehensive capital plan backed by an investor who has demonstrated financial credulity of meeting the regulatory capital requirement has been submitted to the monetary board.
Sinhaputhra Finance PLC is awaiting the response of the monetary board towards this end.
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